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IMPACT Livestream: 
Japan’s Solar PV Outlook in a Changing Power Market

[IMPACT Livestream]: Japan’s Solar PV Outlook in a Changing Power Market

Date & Time: 2PM-4PM JST Time, July 14 Thursday

Broadcast Platform: Zoom

The solar power sector in Japan is expected to have great potential for growth to 120-140GW by 2030. However, several challenges are hindering investment and growth, especially concerning the changing power market scheme from FiT to FiP, the rise of supply chain costs, and a shrinking profit margin for asset owners and managers. We bring together industry observers, developers, power off-takers, and asset operators to explore the current status.

1. The Japanese government has high hopes for PV, but regulatory changes (FiP scheme) and exchange rate issues have led to market stagnation.

Ms. Izumi Kaizuka from RTS Corporation tells us that more and more sectors have been collaborating to advance the progress of PV in Japan, such as METI, MoE, MLIT, MAFF. The complex calculation process of the FiP system and the rising cost of importing equipment and raw materials make the market less than positive right now. However, being adapted to the new regulations, FiP is still a good business option for large PVs. As for small-scale projects, the regulations are needed to be further discussed.

2. C-PPA is a more flexible option for developers and has a wider acceptance. Retailers/Aggregators’ role becomes essential since they are the link between the suppliers and the consumers.

PPA agreements are divided into Physical (on-site & off-site), Virtual, and Unbundle NFC, and these diverse formats allow different players to find the right type for them. Mr. Tetsuya Oura from BayWa r.e. Japan K.K. thinks that the level of market willingness to buy is relatively high, and C-PPA is now the preferred choice for developers as long as the project's pipeline and offtaker's plans fit together. Many developers have now laid out in this area, seeking more PPA specialists. Mr. Seiya Miyake from Minna-Denryoku Inc. is positive about the idea that retailers/ aggregators will play an even more important role in the electricity market than before.

3. Floating Solar, C&I, and Battery Storage are all likely to have a significant presence in the Japanese market in the future.

Our speakers all mention that the Japanese market is still facing serious problems of land scarcity and grid connection. The government and the market place their hopes on Floating Solar, C&I, and Battery Storage. FiP with battery is likely to be the trend in future auctions. In the meanwhile, developers experiment with Floating Solar, Agri-Solar, Rooftop, and other photovoltaics.

Presenters:

Mr. Isshu Kikuma

Japan Energy Analyst

BloombergNEF

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Ms. Izumi Kaizuka

Director, Principal Analyst

RTS Corporation

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Mr. Tetsuya Oura

President & Representative Director

BayWa r.e. Japan K.K.

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Mr. Seiya Miyake

Chief Operating Officer & General Manager

Minna-Denryoku

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Mr. Yamato Kawamata

Senior Power Market Analyst

Wood Mackenzie 

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Mr. Kazuhisa Yurita

Head of Solar Asset Management

ORIX Corporation

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Mr. Yoichiro Mizuta

Head of Asset Management

Pacifico Energy K.K

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4. Accurate production forecasting and information technology will be important prerequisites to ensure the project profitability and efficient operation of the solar farms.

The introduction of more C-PPAs and FiPs means that operators need to be able to better predict the power generated by their solar farms and that effective and timely monitoring is an important means of improving operational management efficiency. Digitalization will therefore be an important trend in the PV O&M industry.

5.Responding to the changing markets and increasingly unstable supply chains, more long-term service agreements & advanced mounting systems shall be applied in the O&M sector.

Due to shifts in the market, O&M operators need to adapt to C-PPA and FiP to get new solutions. And from the procurement side, the PV equipment and raw materials on the international market are rising. Both Mr. Kazuhisa Yurita from ORIX Corporation and Mr. Yoichiro Mizuta from Pacifico Energy K.K. agree that long-term service agreements and advanced mounting systems will become more common to adapt to obtain a stable trade and operation environment.